Global expansion, localizing content, and selling in multiple currencies and languages
We're a Canadian business which sell 85% to the US. We've been looking into setting up own our webstore for a while and looked into Shopify to easily manage our eBay and Amazon market inventory at one spot including our own store.
However, I have a dilemma whether to sign up on Shopify US or Canada. As I've seen many sellers debate whether to set up 2 stores or multicurrency etc, we're looking forward to the feature which could let us set separate pricing depending on the country. Therefore, at the moment we would probably choose to sell in USD on Shopify. However, should I then sign up on Shopify US or Canada? Even if I set up to charge credit card in USD, would the US credit card charge the "foreign transaction fee" on my customers? As a Canadian, I know our Canadian credit cards do not charge this fee (or just merge it in the total), but my US credit card had had charged this fee even though I bought in USD on a (I thought) US website.
I do not want my customer to be unpleasantly surprised with the extra charge. However, I do want the USD I received to be deposited into my Canadian US Dollar bank account. Could someone answer this question?
Thank you.
Hello, @mT20.
Elias here with Shopify Support. Thank you for reaching out.
I understand you're a Canadian business that mostly sells to the US and Shopify is definitely suitable for managing multiple sales channels, like Amazon or eBay.
Typically, if you're using Shopify Payments, we'd recommend setting up your store to sell in multiple currencies. Selling in multiple currencies with Shopify Payments in Canada allows you to change your payout currency to CAD or USD, so you can receive your funds in USD. Shopify Payments in the US can also sell in multiple currencies, but the payouts is only in USD.
Since the primary concern is the foreign transaction fees, you can set up your store on Shopify US and use a Canadian USD bank account. This way, your US customers won't be charged for foreign exchange fees. However, I do need to clarify that I have seen foreign exchange fees on my Canadian credit card on US purchases before, so it's important to note that your Canadian customers may end up seeing the foreign exchange fees on their transactions.
Whether you chose to sell in USD with Shopify US or Canada, you'll be able to connect your Canadian USD bank account and receive the funds in USD with both scenarios. However, the best option to avoid unpleasantly surprising your customers (US and Canada) and to be able to set separate pricing based on countries is to open separate stores. As you're already aware, many businesses do this and they often incorporate multiple domains (eg. .com and .ca) as well.
I hope this helps! If you have any other questions on this topic, don't hesitate to let me know!
Elias | Social Care @ Shopify
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I have a few questions about the store setup you talk about above:
1) Can a Canadian open a US based store with Canadian address and Canadian bank account (USD bank account) only? Basically no connection to the USA other than 95% of our customers are American.
2) With Americans buying from this Shopify store, will we be subject to the domestic credit card fee or international credit card fee?
3) With Canadians buying from this Shopify store, will we be subject to the domestic credit card fee or international credit card fee?
4) Will there be any exchange rate conversion fees? All customers will be required to pay in USD and we will deposit our earnings directly into a Canadian USD bank account.
I am aware that Canadians purchasing items in the store with a Canadian dollar credit card will need to pay a conversion fee to their credit card company. I just want to minimize my fees as much as possible.
Hey, @Pax.
Thank you for joining the thread!
I understand you have several questions regarding payment processing, and I'll try my best to answer them in the same manner.
1) If you're using Shopify Payments, you can set up your store to process in USD and connect a USD Bank account from a Canadian bank. Another option to consider is setting up your store for multiple currencies, which allows you to process both USD/CAD and get paid in your local currency.
2) Since your store is located in Canada, international and American Express credit cards would still be subject to the international credit card processing fees. If you'd like more information on this, you can view the plan features and fees on our pricing page.
3) Canadian credit cards will be subject to domestic credit card processing fees.
4) Since your store is set up for USD and connected to a Canadian USD bank account, US customers would not incur a conversion fee.
I think the best way to handle the currency for both of your customers' region is by setting up your store in CAD and enabling multiple currency. While multiple currency does convert the payouts to CAD, the currency exchange and conversion fee happens on a payout level and does not affect your customers - this would help minimize the fees for your customers.
Have you had the chance to look at the multiple currency option?
Elias | Social Care @ Shopify
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Hey, @lucas05021.
Thank you for joining the thread!
I understand you're also looking to resolve the problem of selling to US from Canada. Aside from the information that's already discussed in the thread, did you have any other specific questions on this topic?
Did you already create your store using our free 14-day trial (https://bit.ly/2LJ7aas)?
Elias | Social Care @ Shopify
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Hi Elias,
My shop is about to go live in about 14 days.
I don't quite understand the questions you answer above #2 & #3
SCENARIO#1
The store is in US + the currency charged is in the USD = payout to a US DOLLAR checking account IN CANADA.
In this scenario:
1. Why would the customer incur international transaction fees when the processing currency and the payout currency is the same? The store is only Incorporated in Canada but it's a Shopify us-based store.
2. As for my interpretation the merchant should also not be charged the 2.99% currency conversion fee during payout.
3. All Canadian buyers we'll see an international transaction fee
SCENARIO#2
The store is in US + the currency charged is in the USD = payout to a CAD checking account IN CANADA.
1. Again as for my interpretation in this scenario only the merchant should be charged the 2.99% currency conversion fee during payout.
2. All Canadian buyers will see an international transaction fee
This is what I understood from what's on your website about Shopify payouts!
Is this right?
Ash
Hi, @Ash345.
Thank you for joining the thread!
The question above is for a store located in Canada selling in USD and receiving the payouts in USD, so they are using Shopify Payments (Canada). In their case, there is an international credit card processing fee for American Express and international/US credit cards. However, in the two scenarios you've mentioned, it seems that your business is in the US where CAD payouts wouldn't apply.
If you meant to say that your store is Canadian-based but selling in USD and, assuming you are using Shopify Payments (Canada), then you do have the option to receive your payouts in CAD or USD. It's important to note that US-based stores using Shopify Payments (US) does not have the option to receive payouts in a different currency. For more information on this, you can refer to Shopify Payments - Supported currencies.
Scenario #1
1. There is a credit card processing fee because you would be using Shopify Payments (Canada).
2. There wouldn't be a conversion fee charged to the merchant if your funds are paid out in USD.
3. Canadian customers will be subject to a domestic processing fee.
Scenario #2
1. There is a conversion fee because the US funds are converted to CAD when paid out.
2. While Canadian buyers are paying in USD and there is a conversion fee from their credit card - they are subject to the domestic processing fees because the processing gateway is Shopify Payments (Canada).
I hope this clarifies your questions! If you have any other questions on this topic, don't hesitate to let me know!
Elias | Social Care @ Shopify
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Sorry but your explanation isn't very clear or precise.
How do I know if my store is "US-based" or "Canada-based"?
Simple yet,
Can you please tell me
1. How do I become a US-based store so my US customers (The majority of my target market) do not incur international currency processing fees? i.e I want to charge in USD [I understand that my Canadian and customers around the world will incur credit card international transaction fees]
2. I want to get paid out in USD in a US dollar checking bank account in Canada to avoid conversion fee at payout.? [Does Shopify consider this as payment in USD or does it still consider in CAD because the bank is in Canada?]
Hey, @Ash345.
Thanks for the follow-up!
To help determine if your store is US or Canada-based, could you confirm if you are operating out of the US or Canada? It's worth noting that based on where you're operating from, you may be required to provide government issued documents and/or remit taxes in your country.
1. Based on the scenarios you've mentioned, it sounds like you're located in Canada and you want to sell in USD - is this correct? If so, then you can change your store currency to USD and connect a USD bank account from a Canadian bank. In this case, you would be using Shopify Payments (Canada) and processing in USD. However, while this would still be international credit card processing fees, the fee is charged to the merchant and not your US customers.
2. You can receive your payouts in USD using a USD bank account from a Canadian bank and there would not be a conversion fee. With this setup, the only fee you're subject to is the credit card processing fees if you're using Shopify Payments.
If you have any other questions on this topic, don't hesitate to let me know!
Elias | Social Care @ Shopify
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I'm sorry but I don't think we're getting anywhere with this conversation. I don't want to sound impolite but I am pretty sure we are talking about two different things. Unfortunately my questions aren't quite answered and I am even more confused than before.
Thanks anyways
@Elias wrote:Hey, @Ash345.
Thanks for the follow-up!
To help determine if your store is US or Canada-base, could you confirm if you are operating out of the US or Canada? It's worth noting that based on where you're operating from, you may be required to provide government issued documents and/or remit taxes in your country.
1. Based on the scenarios you've mentioned, it sounds like you're located in Canada and you want to sell in USD - is this correct? If so, then you can change your store currency to USD and connect a USD bank account from a Canadian bank. In this case, you would be using Shopify Payments (Canada) and processing in USD. However, while this would still be international credit card processing fees, the fee is charged to the merchant and not your US customers.
2. You can receive your payouts in USD using a USD bank account from a Canadian bank and there would not be a conversion fee. With this setup, the only fee you're subject to is the credit card processing fees if you're using Shopify Payments.
If you have any other questions on this topic, don't hesitate to let me know!
Pretty we are all are talking about the same thing. Unfortunately, we just don't like the answers.
If you are using a Canadian bank and a Canadian registered business, then any sales to American customers (with their American credit cards) will be processed at the international rate, regardless if you want to be paid out in CAD or USD. As Canadian-based sellers we have to eat that extra sales expense, which in turn makes us less competitive with American-based sellers. Instead, we get the "bonus" of being more competitive to Canadian shoppers, but yeah... who cares about that tiny market in comparison lol
The solution is to open a US business and US bank account I guess. As a Canadian, I have opened a US bank account in the past. There are some US banks that will do that, even remotely from Canada. Only then will you be allowed to process transactions through Shopify Payments US and get the domestic credit card rate for American buyers.
What I am unsure of is the bank account name. Maybe someone from Shopify can clarify. Does the bank account name need to be the same as the registered company name? Or can we use a personal bank account? I assume the personal name at least must match the owner of the registered business. Can the bank account be a joint account with at least one name matching the registered business name?
From what I understood in the past, it is simply based on WHERE your business address on the business licence is. If the registered business is in Canada, it is Canadian based Shopify. If your business address is in US, it is US based Shopify.
On top of all these, most US credit cards would charge the credit card user a "international transaction charge" if the processor is not in US regardless of transaction currency. Therefore, there is a high chance that a US customer would email and ask why they are charged a separate fee even though the customer THOUGHT they are buying in USD locally in US.
Thank you both for clarifying and joining the thread!
I'm not sure what the ideal setup is for the bank accounts, as I have seen both, registered business names and personal names, on bank accounts using Shopify Payments. However, if there is an issue with your setup or failed payouts, our Payments team will reach out to you and assist you in resolving these issues.
If you have any other questions, don't hesitate to let me know!
Elias | Social Care @ Shopify
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Yes the explanations from Elias were VERY confusing (and I have 4 degrees).
I am considering switching to Shopify. I run 2 Wordpess/Woocommerce web stores. My business is incorporated in Canada but for my US ordres I ship out of my logistics warehouse in the US which I use as my address for US business purposes. I have Elavon as my US payment processor and my sales are deposited in USD into my US-domiciled bank account at BMO Harris within 2 business days. No x-border fees, no foreign trans fees, no nothin' extra fees, just plain ole nice US dollars less the credit card commission. It's easy to set up, but takes time and no monthly charges if you hold an average of $1,500 in your account. Also what I love is I can just write a cheque and deposit into my Canadian US BMO account and there is no hold.
For Canada I have a separate website and a Canadian Costco Elavon credit card processing account which deposits my sales less commission in CAD into my BMO Canada CAD bank account.
The only issue is one has to have 2 websites and always make any changes on both. The beauty is you can localize the content with the addresses in each country, spelling, anything that is country specific, etc.
The only reason I am looking at Shopify was for the multi-country option with the Advanced $299 USD plan as it would lower my credit card processing fees to 2.5% and I thought allow me to have a localized Canada website without having to redo everything, but the only thing that is localized is the currency the customer sees it seems.
So, my question is: If I set up a US shopify Advanced $299/mos store where 90% of my customers are and localize it for CAD and use Shopify payments (not Elavon aymore) and someone buys from Canada in CAD and I have the sale deposited in CAD into my CAD bank account located in Canada:
1. Does the customer pay any extra fees?
2. Do I pay any extra fees over and above the merchant 2.5% commission for that Advanced account.
Please provide simple answers to these very direct questions.
Hey @Rubberman,
Did you ever sort this out? I am in the same boat and now just figuring out how to get a US store as a Canadian (which address to use) as well as sorting out my US banking via RBC. I am completely overwhelmed by the amount of content and suggestions (or issues that arise beyond "simply" Incorporating in the US after making a huge monetary investment) in order to operate globally without creating the most intimidating "sticker shock" from the Shopify payments automatic checkout conversion... would love to connect.
S
Yes:
1. You cannot have a US Shopify store as a Canadian incorporated business even if you have a US domiciled bank account, a US address and a US IRS EIN #, which we have. You need to be incorporated in the US. Stupid policy.
2. Because of #1 you are stuck with having a Canadian Shopify account which means you will end up paying x-border fee premium on all credit card transactions. It seems though that you may not have pay the USD-CAD exchange if you then have the funds go into a Canadian domiciled USD bank account. I don't know what the x-border fee is but at 1-2% that's a LOT of moula for us.
3. Shopify therefore doesn't work for us, not to mention it's very restrictive in the # of plugins, flexibility, etc. Therefore we use Wordpress/WooCommerce with Divi as our page creator plugin. We use Stripe at 2.9%+30c/transaction to deposit our USD revenue our BMO Harris account which costs zero per mos as long as you have $1,500 in the account. Then we write cheques on that account using ezCheckcprinting.com software ($49 forever) and print the cheque out and deposit it into our BMO Canada USD account with no hold days. Then to convert to $CAD as required we use Norbert's Gambit (google it) using DLR & DLR.U on the TSX to get the spot rate on exchange without the premium that all banks and currency converters use.
The more restrictive ecosystem of Shopify compared to Wordpress/WooCommerce and the fact they have this bizarre requirement that you must have a Canadian store if incorporated in Canada and pay extra fees is a non-starter for us. We are not setting up a US company just to appease them. If the IRS can issue us an EIN as a Canadian company, if BMO Harris can let us open a US-domiciled bank account and if Stripe allows us to also operate from the US, why is Shopify in the dark ages. Ah, I get it, so they can charge us the x-border fee on credit cards and also perhaps the premium on exchanging USD to CAD if one is not savvy enough to set up a Canadian-domiciled USD bank account so that you can do the conversion yourself without paying Shopify their premium.
I hope that helps!
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